Russian Government Threatens to Introduce Quotas on Local Movies

Theaters could also face the reinstatement of VAT on tickets for foreign films.

MOSCOW – The Russian government said it could introduce quotas for local movies or cancel VAT privileges for movie theaters unless the proportion of local films in the total box office reaches 18.2 percent in 2012.

According to Prime Minister Dmitry Medvedev, economic privileges for movie theaters aimed at boosting the local film industry are not working. “I would like to remind you that privileged funding for Russian movies and a zero percent VAT for film theaters were introduced primarily to preserve the domestic film industry for the local market,” he said at a meeting of the government’s council for film industry on Sept. 17, the wire service RIA Novosti reported.

“We have to frankly admit: this task has not been implemented, it didn’t work,” he added.

Culture minister Vladimir Medinsky suggested that if the share of local movies at the box office doesn’t reach 18.2 percent this year, the VAT privilege should be canceled, at least on tickets for foreign movies, and the introduction of quotas for local films should be considered.

The idea of quotas for Russian movies has been raised several times over the last few years against the background of the local fare’s declining share of the total box office. Last January, the economic development ministry sent a proposal to the culture ministry, under which a 24 percent quota for local movies would be introduced. However, the initiative led nowhere.

Meanwhile, since the local fare’s share hit its all-time maximum of 27.6 percent back in 2007, it has mostly been declining.

Last year, the figure stood at 16 percent, a tiny 0.5 percent increase on the previous year. However, it was achieved only thanks to increased ticket prices, while the number of ticket sold actually declined from 29.9 million to 27.5 million, according to Romir Movie Research.